Career colleges regain right to enrol students who have government loans

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More than a dozen career colleges have escaped a student-loan blacklist after the B.C. government admitted unfair handling of the issue.

The blacklist was created during a provincial crackdown on private career colleges where high percentages of graduates were defaulting on student loans. In 2010 and 2011, StudentAid B.C. advised 17 schools that their students would no longer be eligible for government assistance because so many grads had failed to repay. Other schools were put on notice that they would face the same punishment if they did not take action to reduce loan defaults by their students.

Two of the schools took the government to court last year, saying the decision was unfair.

“The institution is not the lender, does not control the lending criteria and has no control over which students are the recipients of loans,” said a statement filed in court on behalf of Automotive Training Centres in Surrey and Academy of Learning in Vancouver. “Further, the institution has limited means to control the life and behaviour of students post-graduation, plays no part in debt collection and cannot control the economy and many other factors that can lead to defaults.”

The schools said loss of designation would have a serious impact on enrolments, profitability and viability.

While not necessarily accepting those arguments, the government conceded that its decision-making process was flawed and allowed the schools to re-apply. Of the 17 institutions that lost their designations, 16 re-applied and were reinstated as of Aug. 1.

But the matter isn’t over. The ministry says it is taking steps to correct its procedural error and still expects schools where default rates exceed 28 per cent to improve their record.

And the firm that represented the two schools, HKMK Law Corporation of Vancouver, was back in court in January arguing that the Advanced Education Ministry should not consider default rates as an indicator of a school’s quality.

“What schools end up doing then is denying admission to the highest-risk students — the single parents, the First Nations persons, new immigrants and so on — because statistically they are the ones most likely to default,” HKMK president John Boon said in an interview.

Students are considered in default when they fail to meet repayment requirements over a period of 150 days.

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Career colleges regain right to enrol students who have government loans

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